*** Author: Suet Ying Chow and Kristina Proskurina *** The slides provide the overview of history of Carlsberg, SWOT analysis for figuring out their threats and opportunities in the markets and business development strategies in China.

1. Carlsberg China
By Kristina Proskurina & Suet Ying Chow

2. Introduction. Brief History

3. History Overview
1978
• originally established in Denmark, officially began its business in Greater China
1981
• the company inaugurated the Carlsberg Brewery in Hong Kong, which became the base for
Carlsberg’s expansion into mainland China
1999
• Carlsberg effectively gave up on China. It sold its Shanghai brewery and let its staff go. Sunny Wong,
one of its key China sales people, left the country and returned to the U.K.
2002
• reappeared in China. It basically ignored the major cities and beer markets of Shanghai, Beijing and
the east coast. Instead, it went far west, into China’s big backyard
By 2006, Carlsberg had
202006
• Carlsberg had 20 breweries in western China. It also had become the market leader in all the Western
provinces in which it had invested
2015
• Carlsberg had more than a 60% share of the market in western China, where beer consumption is growing
at a 12% annual clip, compared with 4% to 5% nationally

4. Current Situation
• Carlsberg's sales in Asia surpassed those in Eastern Europe in 2015
but volume fell in China.
• Carlsberg decided to close seven breweries mainly in eastern China to
focus on strongholds in the western part of the country.
• Carlsberg is the smallest of the world's top four biggest brewers.
• Since assuming his role in 2014, Carlsberg Chief Executive Cees't Hart
has launched a cost-cutting program and a strategy to boost growth.

5. SWOT Analysis

6. SWOT Analysis. Strengths and Weaknesses
Strengths:
• strong customer and brand
loyalty;
• successful expansion strategy
in China;
• global presence of the brand;
• excellent advertising and
branding;
• attractive image of high-quality
beer;
• strong corporate responsibility
policies.
Weaknesses:
• risk of collective lawsuits;
• strong competition;
• low penetration in the market;
• high level of expenses.

7. SWOT Analysis. Opportunities and Threats
Opportunuties:
• expansion on new market, brand
positioning and increasing trend of
life-enjoying lifestyle;
• taking advantage of increasing
spending power amongst the
consumers;
• positioning products for growing
population with high disposable
income;
• launch the new products
(beverages, snacks, food etc.).
Threats:
• local competitors with low-priced
beer;
• stricter laws and regulations on
alcohol consumption in countries of
expansion;
• launching of substitutes by the
competitors;
• favoring and increasing awareness of
the healthy, sporty lifestyle, and
decrease of alcohol consumption at
the end of the day.

8. Strategy Options

9. Go West Strategy since 2002
“West Development Program” launched in 2001
• 325 billion investment
• Boost up the development of Western China cities
 Created more business opportunities & diversity
Carlsberg: Form a strategic partnership with Yunnan government to
build up 2nd big new brewery in 2013
•  15 million hectoliters
•  Stepping stones to Southern and Eastern China

10. Brand Portfolio Strategy since 2002
*Multi-tier branding strategy since 2002
Brand Nature International
Premium
Brands
National
Premium
Brands
Local Brands Niche Market
Brands
Brand Name Carlsberg Huang He,
Lhasa
Include 50
local brands
Carlsberg Chill
Original Mostly brewed
in China
Acquired Acquired Newly created
“Carlsberg”
- Target Segment: Upper and middle class
- Less price sensitive and brand image
conscious
“Carlsberg Chill”
- Target Segment: Young adult aged 23-
28 who enjoy “chilled” lifestyle
- Creative and modern brand logo and
bottle design

11. Acquisition & Joint Venture
• Acquisition:
- 5 breweries in Yunnan and Wusu
 reduce the transportation cost and strengthen the production capacity)
- Brand- Huanghe (30% equity) and Lhasa (33% equity)
• Joint venture:
- With 2 other companies sharing the breweries' ownership in Qinghai
Province
Leverage the market risks & facilitate the relationship with stakeholders

12. Marketing Strategy
CEO of Carlsberg China: “the secret of business in China is to understand the
Chinese dining. If you get the Chinese dining right, you get the Chinese beer market
right (Zhuoqiong, 2013)
1. Prefer eat outside in restaurant
Distribute the products to restaurant more than in supermarket
2. Consume premium beer in premium location
Allocate premium & low-end products to different distribution channels
3. Consume smaller volume of beer at one time
 Pricing strategy: 6 cans as a pack > 1 liter bottle

13. Company Restructuring in 2015
• has closed seven breweries in China, and will lay off around 2,000
people
deliver net benefits of up to 2 billion Danish crowns (£213 million) by
2018.
Half of that would be reinvested in brands to boost sales
• start to show financial benefits in 2017

14. Recommendations

15. Enhance brand awareness- Word of Mouth
- Offer free sample of Carlsberg beer
- Launch marketing event in local community
 Enhance brand awareness

16. Create Stronger Brand Image
• Nature of emerging market
 consumers towards brand
recognition is weaker than in
developed markets
• Clear and simple marketing
positioning and brand image

17. Promote Business Sustainability
1. Motivating repeat purchasing:
Add more value to the product through innovation & collect customer
feedback
 Influence the purchasing decision
Business opportunities will be reshaped & modified
e.g. Bundling pricing/ new bottle design
2. Brand extension
- Vertical & Horizontal extension

18. The End
Thank You!